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Business confidence deteriorates, as consumer mood improves

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Economic research institute GKIʼs Economic Sentiment Index, its combined gauge of consumer and business confidence, fell to 2.4 points in June, from 4.3 in the previous month, as companiesʼ outlook worsened, GKI said on Monday.

GKIʼs standalone business confidence index fell to 5.7 points in June, down from 9.4 in May, as expectations worsened across all sectors.

In the construction sector, civil engineering companies were a little more optimistic, but building companiesʼ outlook deteriorated significantly. Their assessment of output in the previous three months was noticeably poorer, while that of the order stock was moderately worse.

Overall confidence among wholesalers and retailers was little changed, as optimism about sales positions and inventories waned, although bigger orders are anticipated, GKI noted.

Sentiment among service sector companies fell to a level not seen since early in 2017, it added.

The consumer confidence index, the other main component of the Economic Sentiment Index, rose to -7.0 points, up from -10.0, as households were more optimistic about their ability to make savings and more said they planned to make big-ticket purchases.

GKI noted that the last time business expectations were so low was two and a quarter years ago, while the last time consumer expectations were so high was one year ago.

The full report can be read here.

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